Aid for taxation and representation? The effect of foreign tax assistance on democracy in the Global South

Can foreign aid foster democracy? This is a foundational question debated in development studies and donor circles. Within this debate, some scholars argue that aid is detrimental to democratic institutions via an aid curse. The foil to this aid curse, namely that taxation fosters representation, inspires much comparative political economy research. We bring these fields together and approach the aid-democratization and taxation-representation questions through a unique lens: how foreign aid given to assist with tax collection (i.e. tax aid) affects representation. Tax aid is a form of technical assistance associated with increased tax capacity that can be leveraged to assess how such a change impacts democracy. Our statistical estimations indicate that countries receiving tax aid see an improvement in democracy. Survey data analyses show tax aid is associated with increased voting, especially among the middle class, but not changes in government satisfaction. A case illustration of Kenya corroborates our results.